Ask the Credit Expert: What’s the Ideal Credit Score?

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credit expert“Kay” is Kayleigh GaddorCommunity Manager at Credit Karma.

Dear Kay:

Should I leave a credit card open if I’m never going to use it again?


Unless that card has an annual fee, the answer will usually be “yes.” Closing a credit card reduces the overall amount of credit available to you, which affects your credit card utilization rate, a significant factor of your credit score. Having more credit available to you is generally a good indicator of overall creditworthiness, which lenders like to see.  Just keep in mind that you may need to occasionally use the card throughout year to keep the account active (and of course, make sure you pay your bills to keep it current).

How can I find the best credit card for me?


Many of us are inundated with credit card offers mailed directly to our homes. They frequently arrive nicely packaged, touting enticing sign-up bonuses. While this is convenient, applying for each card that sends you an offer isn’t typically the best credit-building strategy. Instead, it’s good practice to review your spending patterns and think about what you want out of a credit card. Do you want to earn cash back on your purchases, or rewards in the form of flights and hotel stays?  If you always fly the same airline or stay in the same hotels, a partner-branded card may be ideal for you. If you only plan to charge necessities like gas and groceries, there are cards that optimize those rewards, too.  And obviously, it’s also important to review the various terms and fine print.  Try comparison shopping to compare offers and rates.  At Credit Karma, we offer tools for comparing credit cards from our marketing partners, as well as a robust section of reviews written by actual cardholders.

Should I consider a balance transfer to help me pay down debt (and eliminate interest on old debts)?


If you are digging your way out from underneath a mountain of credit card debt with a high APR, a balance transfer may be right for you. It’s true that a balance transfer can potentially save you big bucks in interest payments.  However, there are a few things to consider before transferring a balance. Have you asked your current lender for an interest rate reduction? They might say no, but it never hurts to ask. Are you likely to qualify for a balance transfer card? A good credit score is usually required. What kinds of fees are associated with the process?  In general, the more you transfer, the higher the fees. Some cards charge a percentage-based fee on the dollar amount transferred, while others charge interest every month.  Steep fees could negate some of the potential savings. You’ll want to read the fine print to see how long the introductory rate lasts, and what your APR will be afterwards.  It’s critical to be responsible with your balance transfer, and use the opportunity to reduce or eliminate your debt at a lower interest rate.

What is the ideal credit score?


The ideal credit score is one that saves you money in the long-run. Many people fixate on obtaining that “perfect” 850. Truthfully, there’s no reason to – except for bragging rights. While there’s no “ideal” credit score, in general, the best interest rates and financing terms are typically available to consumers with a score of 720 and above in most scoring models.  Once you pass that threshold, there are few additional incentives for a higher score. However, remember that the threshold for the best interest rates varies across products and lenders, and can change depending on other economic factors. It’s not set in stone. Continue good credit habits, and you’ll be on your way to gaining the money-saving benefits of a good credit score.

Content is for entertainment and information purposes only. The opinions expressed in this article are those of the authors themselves, and not necessarily Credit Karma or its affiliates. This post was brought to you by the fine folks at Credit Karma.

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  1. james says:

    how about adding seasoned tradelines to your credit score ? i heard many companies offer adding seasoned tradelines, how much they will improve my score by adding them.

  2. Howie says:

    If we’re looking at FICO models 760 really should be the sweet spot. Credit card companies and auto lenders will likely be quite happy with 700+ but for mortgages you’re safer over 740 / in the 760 range than you are in 720 with getting the lowest interest rates … which can equate to thousands of saved interest.

    Always strive for higher. A higher credit score will never hurt you.

  3. Marie @ Financial Debauchery says:

    Honestly, I’m still a newbie when it comes to credit card and credit score. But, my aunt told me that her credit score is 800 and she it is her ideal credit score.

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